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Initial Energy Support Measures See Little Feed-Through into Prices

GERMAN DATA
MNI (London)

GERMANY FINAL OCT CPI +0.9% M/M, +10.4% Y/Y (= FLSH)
VS SEP +1.9% M/M,
+10.0% Y/Y

  • German October inflation was confirmed at the flash estimates this morning, accelerating by +0.9% m/m and by +10.4% y/y. This was a substantial upside surprise at the prelim release, as price pressures intensified to a fresh post-reunification high.
  • The surge in energy prices remain the key driver of CPI.
  • Today's final press release highlighted the range of fiscal stimuli implemented by the German government to combat the squeeze of energy prices on consumers' income.
  • September saw the expiration of the Summer 9-euro transport ticket and fuel discount, which boosted September CPI to +10.0% y/y. In October the VAT on gas and heating reduced form 19% to 7%.
  • The EUR 200bln energy package measures appear to have been largely outweighed by further energy price hikes. In October energy prices edged down a mere 0.9pp to +43.0% y/y. Further fiscal support measures remain in discussion, including price caps to begin in 2023.
Germany CPI: Energy, Food and Total CPI indexes:

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GERMANY FINAL OCT CPI +0.9% M/M, +10.4% Y/Y (= FLSH)
VS SEP +1.9% M/M,
+10.0% Y/Y

  • German October inflation was confirmed at the flash estimates this morning, accelerating by +0.9% m/m and by +10.4% y/y. This was a substantial upside surprise at the prelim release, as price pressures intensified to a fresh post-reunification high.
  • The surge in energy prices remain the key driver of CPI.
  • Today's final press release highlighted the range of fiscal stimuli implemented by the German government to combat the squeeze of energy prices on consumers' income.
  • September saw the expiration of the Summer 9-euro transport ticket and fuel discount, which boosted September CPI to +10.0% y/y. In October the VAT on gas and heating reduced form 19% to 7%.
  • The EUR 200bln energy package measures appear to have been largely outweighed by further energy price hikes. In October energy prices edged down a mere 0.9pp to +43.0% y/y. Further fiscal support measures remain in discussion, including price caps to begin in 2023.
Germany CPI: Energy, Food and Total CPI indexes: